Ireland's Mallinckrodt buys US regenerative medicine firm

Stratatech’s StrataGraft in phase III testing for burns treatment

Ireland's Mallinckrodt Pharma has continued its acquisitive streak with a deal to buy Stratatech, a US firm developing a biologic treatment for severe burns.

Mallinckrodt has not divulged the financial terms of the deal, but it said adding Stratatech would bolster its pipeline of hospital products with an off-the-shelf skin substitute - called StrataGraft - that is currently in phase III testing for partial thickness burns.

StrataGraft is an engineered sheet of human skin cells (keratinocytes and epithelial cells) that is designed to mimic human skin and promote healing of second- and third-degree burns and reduce the risk of infection and scarring.

If approved, StrataGraft could be a practice-changing alternative to taking often-painful skin grafts from uninjured areas of a burns patient's body - last year it became the first therapeutic product to achieve a clinical outcome comparable or superior to skin grafting in a small trial.

Around 10,000 people are hospitalised for severe burns in the US every year, according to Stratatech, which estimates the current market for products used in skin graft procedures at around $300m a year.

Stratatech has been targeting approval of the biologic in 2020 and says it has patent protection for StrataGraft until 2032. It was awarded orphan status by the US FDA in 2012, and Stratatech was also given a five-year, $247m contract by the US government last October to develop the product.

Commenting on the deal, Mallinckrodt chief executive Mark Trudeau said that buying Stratatech gives it a platform to develop cell-based therapies that could be used to treat a wide variety of wounds over the coming years.

StrataGraft is also in phase II testing for full thickness burns, while Stratatech's pipeline includes therapies for epidermolysis bullosa, ulcers associated with scleroderma, plastic surgery procedures, diabetic foot ulcers and to prevent recurrence of skin cancers.

The latest deal comes after a string of other acquisitions by Mallinckrodt, as it has tried to shift the balance of its portfolio away from its heritage in medical imaging and into specialty pharmaceuticals.

To that end the company signed two deals in 2015, namely a $1.3bn deal to buy immune cell therapy specialist Therakos and the $2.3bn purchase of hospital treatments company Ikaria.

In the previous year it shelled out $5.6bn for Questcor Pharma - getting hold of fast-growing autoimmune and inflammatory drug Acthar (repository corticotropin injection) - and another $1.3bn for Cadence Pharma and its injectable painkiller Ofirmev (acetaminophen).